Optimal order quantity for switch harnesses

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Reference no: EM131783642

Splendid Splinter uses 2,400 switch harnesses a year and its vendor charges $50.40 per unit. Ordering cost have been estimated at $60 per order, and inventory holding cost are charged at the rate of 12% (per year) of the purchase price or production cost of an item. If the optimal order quantity for switch harnesses is used, Splendid Splinter’s annual holding cost will be______.

A. Not greater than $800

B. Greater than $800 but not greater than $1,000

C. Greater than $1,100

Reference no: EM131783642

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